The West Bank’s economy will likely grow about 7 percent this year, according to a report released by the International Monetary Fund (IMF) on Sunday. “Provided remaining restrictions in the West Bank are lifted in the remainder of the year, real GDP in the West Bank is projected to rise by about seven percent in 2009,” the report said.

If the recent growth is sustainable, it would be the “first substantial increase in living standards since 2005.”

Oussama Kanaan, the IMF’s representative in the West Bank and Gaza, told reporters, “For the first time since 2005, there is a realistic chance that the downward trend in Palestinians' living standards in the West Bank can be reversed in the near future, provided that (Israeli) restrictions on movement and access continue to eased.”

Nevertheless, the report cautions that it would likely take several years for the West Bank’s economy to reach pre-2000 levels, before the start of the second Intafada.

“Even in this scenario, real income per capita in 2012 would still be around 20 percent below its level in 2000,” the report said.

While conditions in the West Bank appear to be improving, the Hamas-controlled Gaza Strip remains in a dismal economic state with an unemployment level of 37 percent.

Upon taking office on March 31, Israeli Prime Minister Benjamin Netanyahu announced an “economic peace” policy toward the Palestinians. He has since promised to ease restrictions on Palestinian trade.